The only possibility of a default by the US Government is in the hands of the government and will only happen if the government wants it.   

The big issue that has been making the rounds of the federal government of late has been the issue of the debt limit or debt ceiling that is a self imposed restraint, of sorts, that the legislature has used to limit the amount of money that the government borrows to fund its various operations above and beyond revenues.  The debt limit has been raised many times, now with increasing frequency and in increasing amounts.  For all practical purposes the government has been asking for an ever-bigger credit card and then issuing the card to itself.  As a large number of competent people have pointed out this has been a mistake; you can't spend yourself to prosperity, the bills have to be paid eventually, and raising the debt limit simply is another of those "kick the can down the road" scenarios that have become so much a part of the political scene since President Reagan left office. 

The main reason many politicians claim requires raising the ceiling is that not doing so will cause the nation to default on its debt.  With this in mind let's look as some specific data.  Current federal interest payments are $207 billion compared to $2,016 billion in federal tax revenues. This provides more than ample funds to pay the interest on the debt.  As such, there is an absolute zero chance of default if the debt ceiling is not lifted.  In fact, leaving the debt ceiling as it is will decrease the chance of default because borrowing will, at worst; remain the same as it is now.  This would, under favorable circumstances, theoretically allow the nation to grow its way into paying off the debt.  

On the other hand, whenever the debt limit has been raised government has done nothing about reducing spending, or even holding it steady. Instead, it has immediately increased spending sufficiently that another debt limit increase was required soon after.  The simple truth, based on experience, is that government has been the world's greatest spendaholic, and the present situation where members of the House of Representatives want to actually hold the line is an anomaly.  It is a sane anomaly, but an anomaly, nonetheless. 

Which brings us to the specter of national default?  It will happen only if the executive branch wants a default.  There is enough government revenue available to continue paying interest on the national debt at present levels.  Control of the situation is in the hands of the Presidency and the Treasury Department.  If they want a default it will happen.  If they don't want one it won't happen.  The question then is whether or not the presidency intends to default in order to manufacture a crisis.  The answer to that question is unknown to anyone outside the top levels of the Treasury Dept. 

But there's more.  For years American government and politics texts have described a phenomenon known as the "Iron Triangle."  It is composed of a legislative committee or sub-committee that oversees some particular government program, a citizen interest group that benefits from the program, and the bureaucracy that administers the program.  Obviously, none of these three entities wants to see their programs ended.  In fact, the two government legs of the triangle, the committee and bureaucracy actually want them to grow because growth increases the amount of money the committee controls, and provides job security for the bureaucrats.  As Ronald Reagan's ultimate rule of bureaucracy states, the first duty of the bureaucracy is to protect itself.  It is no wonder that government programs and agencies almost never disappear, even when they have completed their task and have no real reason to continue existing. 

Which brings us to the real reason why the debt ceiling should not be lifted; cutting government.  Assuming that the government intends not to default on the debt, if the borrowing limit does not change then the Treasury Department will be forced to prioritize spending.  If the first priority is debt service, so be it.  Then the remainder of the available cash flow will have to be apportioned among the various government departments and activities that remain on the budget.  Most, if not all, will have to take significant cuts in their budgets.  They won't like it, but failure to do so will only postpone the inevitable.  It will have to happen sooner or later, and as with the treatment of any disease, the sooner the better. 

Right now the Republican Party is the only political organization that is attempting to do anything to solve the national budget problem.  With control of only one house of Congress and the White House in the hands of an enemy of the American people, they cannot cut the budget on their own.  Thus they have only one real choice and that is forcing the issue by refusing to allow any increases in borrowing.  And for anyone who thinks that this is a bad idea, consider that waiting until the entire economy collapses will be worse.  

In his June 29, 2011 press conference Obama suggested that forcing the government to economize would force cuts in the National Weather Service, reductions in college scholarships, no government food inspections or important medical research.  In fact, we don't rely on the National Weather Service all that much any more.  There are numerous other weather related organizations, which provide the same or better information.  The National Weather Service may well be an anachronism. 

Secondly, there is no reason for government to be involved in providing college scholarships.  Thirdly, while one can assert that government food inspections are necessary, there is no reason why such work cannot be carried out by an independent organization, in the same manner as the American Bureau of Shipping does ship safety inspections.  And finally, there is no reason at all for government to be involved in medical research.  Medical schools and biotechnology firms can do the job better and for lower costs.  These four examples are only the tip of the iceberg. 

Obama apparently has decided that we can't save our way to prosperity; that wealth is not the result of productivity and savings, but rather, the size of the bill we owe to our creditors.  Of course, no business can operate that way for long, or any family, or any nation. 

The simple truth is that the current regime is attempting to continue the time honored practice of buying votes with other people's money while expanding government at the expense of the private sector, including the average citizen.  Because the present generation has insufficient funds government has resorted to inter-generational theft, robbing the next generation to pay for its present day profligacy.  Is there economic sabotage going on?  Absolutely there is.  But the sabotage is coming from the Democrats and their cronies who benefit from regulations that impact smaller, companies to the benefit of giant businesses such as GE in another wave of crony capitalism, which provides ample argument for belief that government should have nothing to do with business.   

Despite protestations to the contrary, the current edition of Democrat leadership has become the enemy of the American People.  This is not to say that all Republicans are taking the opposite position; many of them are still more concerned with themselves than with their constituents or with the well being of the nation.  But at least the majority seems to understand that the key to future prosperity is to change course, stop spending and reduce government.  And there should be hope for the remainder who appear to be able to learn that they can do themselves better by allowing the nation to prosper. 

This Independence Day Americans should not just have celebrated the Declaration of Independence from England; they should dedicate themselves to a new Declaration of Independence; this time, from big government.